Paul Prather

A little common sense pays off in many ways

Michael Lewis' book The Big Short: Inside the Doomsday Machine looks at a handful of shrewd investors who foresaw the collapse of the subprime mortgage market, and with it the near disintegration of the global economy.

Several of these guys made fortunes by betting against a market they presciently recognized as based on inane assumptions and perhaps criminal fraud. No matter how spectacular the subprime market appeared, they said, the numbers didn't add up.

They were a tiny minority who had that least common of virtues: common sense.

I pondered common sense as I read The Big Short. I thought about how often, and in how many areas, we injure ourselves by ignoring simple, reasonable answers to our problems.

There's plenty of blame to go around for the subprime debacle. You can justifiably throw stones at Wall Street traders, ratings agencies, government regulators, Congress, community bankers and practically everyone else involved in the financial system.

But one thing that's clear in Lewis' book, as well as in several other accounts of the stock market crash, is that among those responsible for the crisis were more or less average Americans, people of modest means who were eager to take out massive mortgages they should have known they could never repay if they had bothered to do rudimentary math.

Lewis tells, for instance, of a strawberry picker who bought a $750,000 home.

Frequently, such folks were offered real estate loans that bore, say, two-year, low-interest "teaser" rates on which they could, just barely, make the interest payments without accruing any equity. After a couple of years, the interest rates would shoot up. This increase was clearly stated in the contracts. At that point, obviously, the buyers wouldn't be able to pay even the interest. They would default. Generally, that's what happened.

Of course, the bankers who granted these loans were irresponsible or crooked, or both.

But run-of-the mill borrowers were equally greedy and self-deluded. They accepted the loans.

I'd like to wag my head at their foolishness. But when I ponder this, it seems nearly all of us, in some area or another, are just as bone-headed. It's the human condition.

That's what troubles me. I see similar traits in myself and my friends.

Here's a personal example.

I'm middle-aged, diabetic and hypertensive. I'm also, measuring charitably, 40 pounds overweight. My gut hangs over my belt.

Every morning I take a fistful of prescription pills in an effort to control my medical conditions. I take more pills in the evening. This helps me survive — I'd probably be dead or debilitated already without that medication — but bit by bit I'm getting worse.

I know I could salvage my health if I would lose weight and keep it off, if I would eat less, eat better and exercise daily.

I know that. And I've done it before. In the early 2000s, I lost 50 pounds. I worked out at the gym. I ran 5 miles at a stretch. I kept the fat off for a couple of years.

My blood sugar and blood pressure returned to normal. My resting heartbeat dropped to 55 beats a minute, about the rate of an Olympic athlete's heart.

Then I drifted back to my old habits, to doughnuts and sloth.

If I'm sure of anything, it's that there's only one way to be physically fit. Forget fad diets or wishful thinking. You have to burn more calories than you take in. That's all there is to it.

It's common sense. Or rather, it's common sense coupled with self-discipline.

Neither of which I have apparently.

Instead of using the brain the good Lord gave me, I rationalize. I tell myself I'll take a long walk — tomorrow. I'm too tired today and, besides, it's raining. Or I go on the straight and narrow for a while, drop 10 pounds, then reward myself with a cheesecake.

I'm not in all that bad a shape, I tell myself. Before the worst complications of diabetes and high blood pressure really set in, I'll have mastered my vices. By then, I'll have gotten this weight off. I'll be addicted to raw broccoli and tofu. Hey, I'll be fine one day soon.

But today I want a double cheeseburger with fries.

I know this is illogical and self-destructive. I do it anyway.

You probably do something equally dumb.

I see the pattern in people all around me. People who make six-figure incomes yet spend twice what they earn. People who quit excellent jobs for no apparent reason. People who enter the same self-destructive love affairs with the same kinds of jerks over and over again.

These aren't stupid people. In many cases they're well-educated, with high IQs.

What they lack is basic common sense.

What's wrong with the human race? Are most of us irrational?

To some extent we are, if not in one area then in another.

What's the cure? Boy, I wish I knew.

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